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Under Obama’s energy plan, cars would be cleaner but costlier

The president called for tougher fuel-efficiency standards Monday and may let states regulate vehicle emissions of greenhouse gases.

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The loans are contingent on the carmakers coming up with plans for long-term viability by March 31, with an interim report due in February. From its inception last month, this rescue bid was seen as merely the first step toward what will likely be more federal aid.

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The industry has been battered by recession and volatile fuel prices, with sales plunging from a 16-million-vehicles-per-year pace to 10 million per year in recent months.

During the presidential campaign, Obama talked of a bargain between Washington and Detroit: If automakers shifted toward a green future, he said, government would help with the big costs they face, such as healthcare for workers.

Monday’s initiatives by Obama come as Americans are still reeling from last summer’s bout with $4-a-gallon gasoline, and when momentum to take significant action on global warming is rising. Both major-party presidential candidates called for bold new policies on energy and climate change.

Presidents going back to Richard Nixon have promised to wean America from imported oil – and failed. “America has arrived at a crossroads,” Obama said Monday, and must act now even though the recession has caused oil prices to drop sharply from their 2008 highs.

The move, he said, would help pull America out of recession, as the administration’s wider push for energy efficiency would create an expected 460,000 jobs.

David Yarnold, executive director of the Environmental Defense Fund, praised Obama’s approach to the issue. “There is an emerging consensus that we need to build a new economy that creates jobs and protects our environment,” he said.

Lindland notes that last year barely more than 2 percent of all vehicles sold were energy-efficient gas-electric hybrids.

That suggests it may be optimistic to see big changes in US fleets starting in 2011 model year, as Obama outlined. Obama said it is vital “to work with, not against, states” on automotive regulation.

The Clean Air Act gives California special authority to regulate vehicle pollution because the state began regulating such pollution before the federal government got into the act.

But a federal waiver is still required; if the waiver is granted, other states can choose to adopt California’s standard or the federal one.

In 2007 the Bush administration’s Environmental Protection Agency denied California’s waiver request, gaining praise from the auto industry but touching off a storm of investigations and lawsuits from Democrats and environmental groups, who contended that the denial was based on political instead of scientific reasons.

In his executive order Monday, Obama directed the EPA to reexamine the decision. That does not yet overturn anything. But states that want their own power consider it a victory.

California estimates that by 2020, greenhouse emissions could be cut by 18 percent in the state through available engine technologies, cleaner fuels, and mitigation of air conditioning emissions, the Environmental Defense Fund says.

Material from the Associated Press was used in this story.